Failed Allergan agreement hits Peplin's bottom line

Brisbane-based cancer therapeutic developer Peplin's (ASX:PEP) revenues dropped to AUD$3.4 million in the 2004/05 financial year, down substantially from $6.3 million in the previous year, due to the termination in October 2004 of a collaboration and license agreement with US company Allergan for the company's topical skin cancer drug PEP005.

The company's results showed a 62 per cent increase in the company's loss for this financial year from just over $5 million in 2003/04 to $8.2 million in 2004-05.

"[Allergan was] developing our skin cancer product, and in that agreement there were a number of milestones that they would hit along the development pathway that resulted in payments being made to us," said Peplin managing director and CEO Michael Aldridge.

"In effect we now own the product 100 per cent. So rather than having a small share of royalty stream we have a 100 per cent ownership of a revenue stream, and we're developing a product independently."

General and administrative expenses for the company increased by $0.4 million from the previous corresponding financial year to $1.9 million for 2004-05.

"We've maintained an increased level of expenditure, but a constant controlled level of expenditure in the general and administrative area," said Aldridge. "That will continue to increase, because we'll keep on building the team here as we get to be a more complete company."

The company's R&D expenditure decreased slightly from $9.9 million in 2003/04 to $9.7 in 2004/05.